New Employers and automatic enrolment

Taking on staff is an essential part of growing a business and there are several things to consider, including automatic enrolment. Aside from checking whether you need to register as an employer with HMRC; checking if your employee has the legal right to work in the UK and taking out employer’s liability insurance, you will also need to understand your automatic enrolment dates and duties.

The date that your duties start will depend on when you employ your first worker, as this date determines whether you will have a staging date, or whether your duties will begin immediately your member of staff starts work. Automatic enrolment duties apply to all employers. If you start a new PAYE scheme between April 2012 and 30 September 2017 your staging date will be between 1 May 2017 and 1 February 2018. If you become an employer now and don’t use a PAYE scheme to pay your staff, then you will not have a staging date. If your staff earn below £113 per week or £490 per month, HMRC may not require you to set up a PAYE scheme but you still have certain automatic enrolment duties and must start them as soon as you employ your first member of staff.

You must write to you staff to tell them how automatic enrolment applies to them. If they then choose to be put into a pension scheme, you must set this up for them but you do not have to pay into it. When you start to pay your staff over £113 per week, then you must set up a PAYE scheme with HMRC. The Pensions Regulator will then write to you and ask you to complete a declaration of compliance by a specific date. In some cases, directors may be exempt, if they do not have a contract of employment.

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